Research & Forecast Report DES MOINES Accelerating success. Q3 2016 Multifamily Source: AXIOMetrics. RCA, CoStar Market Survey Results and Forecasts Sequential Month Annual 4Q15 1Q16 2Q16 3Q16 Sep-16 2014 2015 2016F 2017F 2018F 2019F 2020F $930 $932 $951 $963 $934 $922 $925 $951 $982 $1,017 $1,050 $1,078 Per Sq. Ft $1.01 $1.01 $1.03 $1.04 $1.01 $1.00 $1.00 $1.03 $1.06 $1.10 $1.13 $1.16 Effective Rent Growth - Annually 0.1% 1.0% 2.9% 4.1% 3.5% 1.6% 0.3% 2.8% 3.3% 3.5% 3.3% 2.6% Effective Rent Per Unit Effective Rent Growth - Quarterly Occupancy Rate 0.6% 0.2% 2.1% 1.2% 94.2% 94.9% 96.2% 95.9% 95.6% 95.1% 94.8% 95.7% 96.0% 96.2% 95.9% 95.2% 0.2% -0.1% -0.3% 0.9% 0.4% 0.1% -0.3% -0.7% Occupancy Change - Annually -1.1% 0.5% 0.9% 0.6% Occupancy Change - Quarterly -1.2% 0.8% 1.3% -0.2% $-14.51 $-10.56 $-3.77 $-5.62 $-9.39 $-12.61 $-13.11-1.6% -1.1% -0.4% -0.6% -1.0% -1.4% -1.5% Economic Concessions Concession Value As a % of Asking Rent RECENT SALES Date Property Name Address City Units Year Built Price in $ Sep-16 Park Forest 2101 E Virginia Des Moines 144 1979 6,550,000 $/Units 45,486 Sep-16 Watermark at Jordan Creek 6455 Galleria Dr West Des Moines 176 2014 26,500,000 150,568 Aug-16 University Mills 2124 W 27th St Cedar Falls 121 2001 16,400,000 135,537 Apr-16 The Flats 3000 University Ave West Des Moines 331 1973 / 2016 9,985,000 30,166 Mar-16 The Grove Ames/Copper Beech Ames 1407 S Grand Ave Ames 425 2011 48,934,995 115,141 Mar-16 Hillcrest Park 9614 University Ave Cedar Falls 132 2001 18,250,000 138,258 Nov-15 Metro Lofts 100 2nd Ave Des Moines 111 2010 3,500,000 31,532 Nov-15 South Duff Community Park 416-528 Billy Sunday Rd Ames 209 2004 21,300,000 101,914 Nov-15 Ashbrooke Apts 317 NE Delaware Ave Ankeny 196 1990 12,400,000 63,265 Oct-15 Triple Crown 1103 Greenway Ct Altoona 76 1982 4,109,000 54,066 Oct-15 Hillcrest 7201 SE 5th St Des Moines 90 1977 4,250,000 47,222
SUPPLY AND DEMAND According to the Bureau of Labor Statistics, job growth in Des Moines-West Des Moines, IA Metro Area was 1.7% in August 2016, reflecting 6,100 jobs added during a 12-month period. The metro job growth figure was at the national number. Axiometrics forecasts Des Moines-West Des Moines, IA Metro Area s job growth to be 1.3% in 2017, with 4,425 jobs added. Job growth is expected to average 1.6% from 2018 to 2020, with an average of 5,988 jobs added each year. On the supply side, permits for 3,161 multifamily units were issued in the 12 months ending in August 2016, up 1,351 units from the prior year s sum. In terms of total residential housing, 6,675 units were permitted in the 12 months ending August 2016, an increase of 1,231 units from the prior year s total. Market Employment and Permitting Annual August-16 Annual Forecast 2013 2014 2015 Market National 2016F 2017F 2018F 2019F 2020F Employment (000s) 335.3 343.5 348.8 358.8 144,424.0 354.2 358.6 363.4 369.9 376.6 Job Gain (000s) 8.4 8.2 5.2 6.1 2,451.0 5.4 4.4 4.8 6.5 6.7 Job Growth (%) 2.6% 2.4% 1.5% 1.7% 1.7% 1.6% 1.2% 1.3% 1.8% 1.8% Total Residential Permitting 4,926 4,414 5,444 5,717 1,056,185 6,242 4,451 3,574 3,819 4,228 Relative Change 18.3% -10.4% 23.3% 34.5% 2.3% 14.7% -28.7% -19.7% 6.9% 10.7% Single Family Units Permitted 3,336 2,955 3,495 3,068 658,713 Relative Change 18.8% -11.4% 18.3% -4.2% 9.1% Multifamily Units Permitted 1,480 1,398 1,810 2,525 368,231 Relative Change 10.3% -5.5% 29.5% 155.8% -8.2% Multifamily as a % of Total 30.0% 31.7% 33.2% 44.2% 34.9% Demand/Supply Ratio Job Gain / Total Residential Units Permitted 2.0 1.7 1.2 1.4 2.4 1.0 0.7 1.1 1.8 1.8 Job Gain / Single Family Units Permitted 3.0 2.5 1.8 1.9 4.1 Job Gain / Multifamily Units Permitted 6.3 5.5 3.8 6.2 6.1 Multifamily Absorption and Supply Annual 3Q16 Annual Forecast 2013 2014 2015 Market National 2016F 2017F 2018F 2019F 2020F Total Units Absorbed 454 1,730 1,242 1,305 274,353 2,556 1,792 973 387 285 New Supply 1,206 1,330 1,843 1,185 367,859 2,075 1,756 838 700 782 Inventory Growth 1.8% 2.3% 4.1% 2.7% 1.4% 2.8% 4.9% 1.7% 1.3% 1.4% MULTIFAMILY ADVISORY GROUP P. 2
PIPELINE MAP 32 30 20 24 10 23 28 8 27 9 14 25 12 3 17 11 13 22 15 4 21 19 16 31 18 7 6 2 1 29 5 26 We were extremely pleased with the East Region team and its ability to attract an incredible amount of interest in our 3 assets. The number of offers received and the end results exceeded our expectations. They have a talented group who was a pleasure to work with. Their performance stands out against any of the groups we work with nationally. Nels Billsten, Vice President CORE Realty Holding Management MULTIFAMILY ADVISORY GROUP P. 3
PIPELINE DETAIL # Name Status Owner Address Market Units 1 Aspire Apartments Phase II Under Construction Signature Commercial RE Ghroup 6950 Stagecoach Dr Dallas County 176 2 BelleMeade Apartments Phase II Under Construction The Richdale Group 204 S 64th St Dallas County 168 3 Bici Flats Under Construction Ralph Gilotti 1405 SE 1st St McKinley School-Columbus 154 4 Cadence Apartments Under Construction Hubbell Realty Company 6320 Merle Hay Rd Outer West Des Moines/ Urbandale 5 Carman Estates Under Construction Jerry's Homes Inc 2314 E Porter Ave Easter Lake Area 96 6 Cascades at Jordan Creek - Phase II Under Construction Perry Reid Properties 8350 Cascade Ave Dallas County 201 7 The Cove at Kettlestone Under Construction Caliber 1272 SE Bishop Dr Dallas County 131 8 Cityville on 9th Street - Phase II Under Construction Hubbell Realty Company 520 SW 9th St Downtown Des Moines 228 9 Confluence On 3rd Under Construction Roers Investments 103 SW 3rd St Downtown Des Moines 211 10 Fourth and Court Apartments Under Construction Vine Ronald 420 Court Ave Downtown Des Moines 82 11 Eagle View Lofts Under Construction Hansen Real Estate Services 511 Shaw St East Village 120 12 East Village Apartments Under Construction Tim Rypma 219 E Grand Ave East Village 98 13 Fieldstream Apartments Phase II Under Construction Edward Rose & Sons 3289-3305 NW Brookstone Ln 195 Outer Ankeny/Saylorville 168 14 Harbach Lofts Under Construction Harbach Building Llc 300 SW 5th St Downtown Des Moines 103 15 Havenwood Under Construction Redwood Living 1250 SW State St Outer Ankeny/Saylorville 106 16 Ironwood - Phase II Under Construction Haverkamp Properties 2570 1st Ave S Outer SE Des Moines N 147 17 Jackson Crossing Under Construction Neighborhood Development Corporation 18 Jordan West Apartments Under Construction Commercial Investment Properties 100-150 Jackson Ave McKinley School-Columbus 172 360 Bridgewood Dr Dallas County 180 19 Linden Oaks Under Construction Redwood Living 400 Adventureland Dr Outer SE Des Moines N 98 20 R&T Lofts Under Construction TWG Development 715 Locust St Downtown Des Moines 162 21 Residences at 62W Under Construction R&R Realty Marketing Group 6000 NW 62nd Ave Outer West Des Moines/ Urbandale 22 The Cove at Prairie Trail Phase II Under Construction Caliber 1918 SE Lesina Ln Outer Ankeny/Saylorville 86 23 The Edge at Gray's Landing Under Construction Sherman Associates, Inc. 406 SW 9th St Downtown Des Moines 90 24 The Equitable Lofts Under Construction Foutch Brothers 604 Locust St Downtown Des Moines 146 25 The Verve Under Construction Principal Mutl Life Ins Co 700 E 4th St East Village 123 26 Fort Des Moines Under Construction Blackbird Investments 6700 Chaffee Rd Outer SE Des Moines S 142 27 Fourth and Court Proposed City of Des Moines 4th And Court Avenues Downtown Des Moines 200 28 The Nexus at Gray's Landing Proposed Sherman Associates, Inc. 415 SW 11th St Downtown Des Moines 142 29 Village of Ponderosa Proposed Evercore Companies LLC Bluestem Circle & Crescen Outer West Des Moines/ Urbandale Source: CoStar 30 619 Grand Ave Proposed Nelson Construction Services 619 Grand Ave Downtown Des Moines 175 31 Waveland Park Proposed Hubbell Realty Company 1818 48th St Waveland Park 72 32 2301 Ingersoll Ave Proposed Roers Investments 2301 Ingersoll Ave Woodland Heights 162 0 500 Total Units 4,834 MULTIFAMILY ADVISORY GROUP P. 4
WE CAN HELP WHO WE ARE One of the largest and most experienced teams of multifamily specialists in the industry MORE THAN 50 Dedicated Multifamily Professionals & Advisors COVERING OVER 20 STATES Expansive geographic footprint As an investor in multifamily properties, you need a firm that provides experience, broad reach and the ability to market an asset no matter how challenging the economic environment. You need a team that specializes in your market you need The East Region Multifamily Advisory Group. Colliers International has one of the largest and most experienced teams in the industry, strategically located in key markets throughout North America. Our combination of market dominance, expertise, and singular focus, make us uniquely successful in helping our clients achieve their disposition objectives. How are we able to bring together the skills and tools necessary to complete challenging assignments? Our East Region Multifamily Advisory Group is connected by purpose and focus. Our team is dedicated to sharing information on market opportunities, capital sources and buyers/sellers to achieve the best results for our clients. MORE THAN 30,000 Units sold since 2011 $2.0 B Group gross transaction value in since 2011 MULTIFAMILY ADVISORY GROUP P. 5
Bob Galamba, CCIM, SIOR SENIOR VICE PRESIDENT EAST REGION bob.galamba@colliers.com DIR +1 816 556 1152 Gabe Tovar ASSOCIATE EAST REGION gabe.tovar@colliers.com DIR +1 816 556 1161 Will Mathews PRINCIPAL EAST REGION INSTITUTIONAL CLIENT GROUP will.mathews@colliers.com DIR +1 404 877 9285 Brooks Colquitt ASSOCIATE EAST REGION brooks.colquitt@colliers.com DIR +1 404 978 2337 Craig Brown ASSOCIATE EAST REGION craig.brown@colliers.com DIR +1 404 978 2336 AT YOUR SERVICE To learn more, scan this with a QR code reader or visit: www.colliersmultifamilyeast.com MULTIFAMILY ADVISORY GROUP P. 6